Settlements and Payments

[Kellyfl]

I have several questions. Our business paid several vendors though our lawyer. We paid some settlements and paid some of the debt we owe to other vendors. 

Now, I have a list of the amounts paid to each vendor and for some of these vendors I have bills entered on QB (Not for the settlements).

So my questions are, what is the procedure to enter the settlement payments and how do I apply the payments when we were not the ones that issued the check, but the lawyer. There is no way to enter a check to pay this settlement because it was not done through any of our banks accounts. 

My other question is about the payments we made to the vendors that I do have bills for... for example, we owed $30,000 to ABC, Inc and we paid $15,000.  I know we now owe $15,000 but how do I apply the payment when again, I don't have a check # or it was not done through our bank accounts and I don't know how ABC, Inc applied our payment? So I wouldn't know which bills to pay? I can ask for a payment a receipt but was wondering if there is another way to do this.

Thank you! I am sorry if the way I explained it is confusing.

[Rose-A · Accepted solution]

Thanks for checking in with us, Kelly-GBGH1.

I'd be happy to provide you the procedure on how to enter settlements and payments via QuickBooks Online.

A Clearing Account is an account you use to move money from one account to another account when you cannot move the money directly. The following are the common uses for a clearing account. 

• Move an amount from one AP account to another AP account.
• Record a refund check from one vendor on behalf of another vendor.
• Transfer a Bill or Bill Credit from one Vendor to another, e.g., bill consolidation.

Create a clearing account:

1. Select Accounting from the left menu, then Chart of Accounts and select New.
2. In the Account dialog, select Bank from the Account Type drop-down list.
3. Choose a Detail Type drop-down list.
4. Enter a Name for the account.
5. Select Save and Close.

Also, you may find this article helpful: https://quickbooks.intuit.com/community/Income-and-expenses/How-to-enter-and-pay-bills/td-p/186102.

I'm always here to help you out if you need additional assistance with settlements and payments in QuickBooks Online. 

[Kellyfl]

Thank you! This cleared my doubts.